Directional Bias For The Day:
- S&P Futures are higher; moving sideways to down up since 4:00 PM on Wednesday
- Odds are for a sideways to down day with choppiness and elevated volatility – watch for break above 2661.00 and break below 2648.00 for clarity
- Key economic data due:
- Unemployment Claims (206K vs. 226K est. and 233K prev.) at 8:30 AM
- Import Prices (-1.6% vs. -1.0% est. and 0.5% prev.) at 8:30 AM
Markets Around The World
- Markets in the East closed up
- European markets are mostly higher – U.K and Switzerland are lower
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.913%, up from December 12 close of 2.906%;
- 30-years is at 3.157%, up from 3.148%
- 2-years yield is at 2.779%, up from 2.767%
- The 10-Year-&-2-Year spread is at 0.139, up from 0.127
- Critical support levels for S&P 500 are 2636.19, 2621.3 and 2614.86
- Critical resistance levels for S&P 500 are 2670.49, 2685.44 and 2703.22
- Key levels for eMini futures: break above 2661.00 the high of 3:30 AM and break below 2648.25, the low of 7:00 AM
- On Wednesday, at 4:00 PM, S&P future (December contract) closed at 2651.50 and the index closed at 2651.07 – a spread of about +1.00 points; futures closed at 2652.50 for the day; the fair value is -1.00
- Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up by +6.00; Dow by +31; and NASDAQ by +34.25
Directional Bias Before Open
- Weekly: Uptrend Under Pressure
- Daily: In Correction
- 120-Min: Side
- 30-Min: Side
- 15-Min: Side
- 6-Min: Side-Down
The trend and patterns on various time frames for S&P 500 are:
|2-Hour (e-mini future)||
|30-Minute (e-mini future)||
|15-Minute (e-mini future)||
Major U.S. indices closed higher on Wednesday December 12. The volume was mixed. Dow Jones Industrial Average and Dow Jones Transportation Average traded in higher volume. Most indices closed below their open. Russell 2000 and Wilshire 5000 Total Market Index closed above their open.
The S&P 500 rose 0.5% on Wednesday, although it gave up a good chunk of its gains in the afternoon after trading as high as 1.9% intraday. Optimism that trade relations between the U.S. and China were progressing fueled the rally effort, but selling would accelerate into the close, leaving the benchmark index at its session low.
The Dow Jones Industrial Average (+0.6%) and the Nasdaq Composite (+1.0%) also experienced some selling to finish near their session lows. The Russell 2000 (+1.1%) led all the indices, but also finished off its highs for the day.
The consumer discretionary (+1.1%), materials (+1.0%), health care (+0.9%), communication services (+0.8%), and information technology (+0.8%) sectors led today’s gains.
Chip stocks, in particular, put in another strong showing with the Philadelphia Semiconductor Index rising 1.5%. The group’s recent outperformance has helped contribute to the tech sector’s leadership position this week (+2.3%).
The defensive-oriented consumer staples (-0.2%), utilities (-0.6%), and real estate (-1.9%) sectors, meanwhile, finished in the red as the market adopted more of a risk-on tone.
Strikingly, the Dow Jones Transportation Average, which is a key driver of economic sentiment, was also unable to find steam.
Overseas, attention turned to the UK, where Prime Minister Theresa May won a “no confidence” vote from her own Conservative Party with respect to her leadership. The vote came amid the heightened uncertainty surrounding the UK’s Brexit plan. The British pound rose 1.1% to 1.2617 against the dollar, which also benefited from the U.S. Dollar Index losing 0.3% to 97.08.
Reviewing Wednesday’s economic data, which included the Consumer Price Index for November and the weekly MBA Mortgage Applications Index:
The key takeaway is that consumer inflation trends are not running away from the Federal Reserve’s longer-run target, which should feed into the market’s growing belief that the Federal Reserve has some data-based scope to take it easy after a December rate hike.
- S&P 500 Sectors
|Sector||Daily Trend (Visual)||Relative Strength (Last Month – November)||Relative Strength (Current)||%K vs. %D|
|Consumer Staples||Under Pressure||XLP||XLP||Cross-Under|
|Industrials||Down||XLI (Cross – Over)||XLI||Below|
|Heath Care||Under Pressure||XLV (Cross – Over)||XLV||Cross-Under|